02 April 2019

Is overpaying your mortgage the right decision for you?

Overpaying on your mortgage means you can save money on the total amount of interest you pay and potentially clear your mortgage balance quicker.

However, it’s not a straightforward decision and it’s important to weigh up all the pros and cons before making any overpayments.

We take a closer look at some of the questions you should be asking if you're thinking about overpaying your mortgage in the near future.

Is it the best use of your money?

The first thing to do is consider whether making mortgage overpayments is the best use of any spare cash you have. Do you have other debts, such as credit cards or loans, with larger interest rates than your mortgage, which might be preferable to pay off first?

It’s also worth looking at what interest rate you could get if you put the cash into savings each month.

Will you have to pay any penalties?

You may face an Early Repayment Charge (ERC) for overpaying your mortgage, which could outweigh any gains from overpaying, so it’s important to check back over your original mortgage offer.

If you have a fixed or tracker mortgage deal with Nationwide you’ll have an overpayment allowance, dependent on the date you reserved your mortgage. You won’t be charged for any overpayments made within your allowance.

If you’re currently on our Base Mortgage Rate (BMR) or Standard Mortgage Rate (SMR) you can make unlimited overpayments without being charged

If you can't find your original mortgage offer, your annual mortgage statement will show any applicable ERC at the date of the statement.

Visit our Overpayment support page to find out more or make an overpayment.

YOUR MORTGAGE IS SECURED ON YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DON’T KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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